RESOURCE MATERIAL SERIES No.83

INTERNATIONAL CO-OPERATION IN THE RECOVERY
OF CRIMINAL ASSETSJean B. Weld

I. INTRODUCTION
On 25 July of this year, U.S. Attorney General Eric Holder, in remarks to the African Union in
Kampala, Uganda, announced a new Department of Justice initiative “to combat and prevent the costs andconsequences of public corruption.” In so doing, he noted the World Bank’s estimate that out of a world
economy of 30 trillion dollars per year, at least one trillion dollars is spent on bribes. The project, known as
the Kleptocracy Asset Recovery Initiative, will dedicate a team of prosecutors to combat “large-scale foreign
official corruption and recovering public funds for their intended – and proper – use: for the people of ournations.” Attorney General Holder promised that the U.S. will continue to work with all governments tostrengthen the judicial sectors throughout the global community in order to help stem the scourge of grandcorruption. President Obama approved the Kleptocracy Initiative as part of a “new standard of transparency”
highlighted by the recent enactment of financial reform legislation in the U.S.
Recognizing that this conference is dedicated to general issues of asset recovery, with an emphasis on
corruption and organized crime, this paper will explore tools which investigators and prosecutors currently
have available to seek assistance from other countries in criminal matters. It will also address more
specific issues involved in tracing, identifying, restraining, and eventually confiscating the proceeds andinstrumentalities of transnational crime and corruption.

II. OVERVIEW OF GLOBAL TOOLS FOR MUTUAL LEGAL CO-OPERATION
A. Formal and Informal Mechanisms for Assistance
Historically, governments have relied primarily on formal requests from other governments for legal
assistance in criminal matters. For the most part, governments must seek such assistance through one offour possible modes: (1) an international convention or agreement providing for mutual legal assistance(“MLA”); (2) a bilateral mutual legal assistance treaty (“MLAT”); (3) domestic legislation permittinginternational co-operation; or (4) a promise of reciprocity through diplomatic channels (often called a “letter
rogatory”).
A letter rogatory was the traditional means for obtaining such assistance, and consists of a formal requestfrom a court in one country to a court in another country, generally for evidence or service of process. These
requests are transmitted through diplomatic channels of each country in order to be received by the foreign
court, and a certificate of service or evidence must be returned in the same manner, creating a slow process
for obtaining assistance.1 Countries using letters rogatory to obtain evidence in criminal investigations,for example the identification of assets, may use the same vehicle for requesting restraint of those assets.
However, use of a bilateral or multilateral agreement will generally result in a more expeditious process
because such requests are generally handled directly between the central authorities of each country.
* Senior Trial Attorney, International Unit, Asset Forfeiture and Money Laundering Section, Criminal Division, U.S.
Department of Justice. The views expressed in this article are those of the author and do not necessarily reflect the views orpolicies of the U.S. Department of Justice.
1 Several Conventions signed in the Hague have supplanted the need for letters rogatory, but only in civil and commercial
matters: the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters(“Hague Service Convention”) signed on 15 November 1965; and (2) the Convention on the Taking of Evidence Abroadin Civil or Commercial Matters (“Hague Evidence Convention”) signed on 18 March 1970. Neither Convention permits
assistance in criminal matters, however.

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1. Bilateral Mutual Legal Assistance Treaties (MLATs)
The most common formal procedure used by the United States to request or provide legal assistance incriminal matters is through a formal bilateral MLAT. An MLAT is a formal agreement, generally negotiatedand approved by the ministries of justice and foreign ministries of both countries, which provides for thegathering of information in connection with the enforcement of the criminal laws of both countries. The
United States currently has bilateral mutual legal assistance treaties with over 70 other countries andone with the European Union. Most of these MLAT agreements have provisions governing mutual legal
assistance in confiscation or forfeiture matters as included in the enforcement of criminal laws. These
provisions obligate parties to provide to each other formal assistance in the nature of restraint of property
which is subject to confiscation, and to assist in the eventual confiscation of the property. Generally, an
MLAT agreement will require a form of dual criminality, sometimes called dual forfeitability, for assistanceto be available – in other words, that the conduct underlying the confiscation in Country A also subject theproperty located in Country B to forfeiture had the conduct occurred in Country B.2 MLAT’s are often used
to obtain financial records and to obtain search and seizure warrants or orders in a foreign country.
2. United Nations Conventions and Other Multilateral Treaties
For foreign partners with whom we do not have an MLAT, the U.S. will use the appropriate United
Nations Convention, or, if preferred by the other country, a multilateral treaty such as the Inter-American
Convention on Mutual Assistance in Criminal Matters, which has been in effect since 1992. Depending
upon the relationship and the willingness of the other country, these Conventions may provide results as
satisfactory as an MLAT.3
3. Informal Channels of Assistance
Often, near the beginning of an investigation, coercive powers are not yet needed, and some formof “informal assistance” may suffice to provide information helpful to the investigation. This term isgenerally used for assistance through channels outside of the formal MLA channels, often through directcommunications between counterparts such as financial intelligence units (“FIU’s”), police, prosecutors
or investigating magistrates sharing intelligence or data which is legally available to that agency throughdomestic databases.
The Camden Assets Recovery Inter-Agency Network (“CARIN”) is one such example of “an informal
network of contacts and a co-operative group in all aspects of tackling the proceeds of crime.” See http://
www.europol.europa.eu/publications/Camden_Assets_Recovery_Inter-Agency_Network/CARIN_Europol.
pdf. CARIN’s membership consists of law enforcement and judicial authorities from the European Unionand invited jurisdictions, and observer status is granted to several others. This organization began in
October 2002 with a conference of the Criminal Assets Bureau of Ireland and Europol held at the Camden
Court Hotel in Dublin, Ireland. CARIN has become an effective law enforcement tool used among member
countries for the expedient sharing of information and use of multiple tools available for each jurisdiction to
trace, freeze or seize, and confiscate the assets of international criminal organizations.
Such informal assistance can be exceedingly helpful to the process of asset recovery, particularly in theinitial identification of other names used by the criminal targets, associates, and properties in the names ofthese individuals. Less formal contacts can often be the starting point for later formal requests. Informal
assistance creates a dialogue which can produce invaluable information, but formal MLA will likely beneeded to obtain documents and witness statement to be used in court as evidence. Following the informal
assistance, if permitted, a draft of the formal MLA request can be sent to the other country to insure thatthe prerequisites are met. This practice can hopefully avoid time-consuming delays resulting from rejectionsof the request for failure to comply with treaty requirements.

2 Such a provision often eliminates the ability to provide formal legal assistance in criminal tax matters because many

countries, including the United States, do not provide for forfeiture or confiscation for tax crimes.
3 For example, because of the absence of a bilateral MLAT with Colombia and the Dominican Republic, the U.S. routinely uses
the Vienna and Palermo Conventions, with excellent results.

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B. Egmont Group of Financial Intelligence Units
What is now known globally as the Egmont Group began in 1995, at a meeting of heads of FIUs at theEgmont Arenberg Palace in Brussels.4 The Group now includes 121 member countries, and meets on aregular basis throughout the world to improve methods of international co-operation, especially in the areaof information exchange through its Egmont Secure Web (“ESW”), which only member FIUs are permitted
to access. The assistance which member FIUs can render to each other through Egmont varies, and isdependent upon domestic law. The primary function of many FIUs is the collection and storage in a databaseof all suspicious activity reports (“SARs”)5 generated by entities within country which are required to filethem; others actually perform analysis of the SARs and prepare reports; and, still other FIUs have theirown investigators and prosecutors. Generally, an Egmont member receiving a request for information fromanother member will share, often under the terms of a Memorandum of Understanding (“MOU”) which
provides for confidentiality and assurances of reciprocity, whatever information that the requesting FIU
would be permitted to share.
The United States’ FIU, known as FinCEN (the Financial Crimes Enforcement Network) is celebratingits 20th year in operation. FinCen has an International Programs Division dedicated to strengthening support
among its international partners. This Division receives, processes, and responds to requests from foreign
FIUs and acts as a conduit for requests from U.S. law enforcement to foreign FIUs. Historically, FinCEN has
been legally empowered to respond to foreign requests by providing only the information contained in its
domestic database – i.e., SARs, Currency and Monetary Instrument Reports, Currency Transaction Reports
and other documents required by the United States Bank Secrecy Act (“BSA”).
Just this year, in response to our obligations under the US/EU MLAT, FinCEN amended its regulations
to permit foreign law enforcement to request, through U.S. law enforcement attachés, account informationfrom U.S. banks in certain defined cases. Initially, this power was granted to FinCEN under Section 314(a)of the USA PATRIOT Act of 2001. Currently, U.S. investigators may submit a Section 314(a) request inconnection with an investigation of terrorism or significant money laundering, and FinCEN will contact themore than 25,000 U.S. financial institutions to identify accounts and transactions of the suspected targets.
Every two weeks, FinCEN sends the 314(a) requests via a secure Internet website. The institutions must
query their records for data matches during the preceding 12 months and transactions during the preceding
six months, and have two weeks to respond if a match is identified. FinCEN bundles the responses andsends them to the requesting agency. As noted, FinCEN is rolling out this ability on a global level, region byregion. By running this scan of U.S. financial institutions for a foreign law enforcement agency, FinCEN will
be able to provide even more helpful information to foreign investigations than it does at the present.

C. United Nations Conventions
1. General Principles
Since its establishment in 1945, the United Nations has provided a global venue for its Member
States to convene and address matters of critical importance to the world’s humanitarian and economic
conditions. With 192 current Member States, the UN has generated many multilateral treaties and protocols(agreements ancillary to treaties) which address issues from nuclear destruction to drug trafficking, money
laundering, terrorist financing, and corruption.
Depending on constitutional requirements, countries generally have one of two options for implementing
their obligations once they have signed and ratified a multilateral agreement such as a UN treaty.6 Somecountries must transpose the treaty provisions into domestic law before the treaty has legal force in thatcountry. For others, the mere act of ratification makes the treaty provisions self-executing. In these latter
jurisdictions, assistance may be granted directly based on the convention provisions.

4 An FIU, for Egmont purposes, is a central, national agency responsible for receiving (and, as permitted, requesting),

analysing and disseminating to competent authorities, disclosures of financial information: (i) concerning suspected proceedsof crime and potential financing of terrorism; or (ii) required by national legislation or regulation, in order to counter money
laundering and terrorism financing. http://www.egmontgroup.org/about
5 For purposes of this paper, the term “SAR” will be used to cover all categories of suspicious financial transaction reporting.
6 Hans Kelsen, Principles of International Law (New Jersey: the Lawbook Exchange, 2003), p. 195 (f).

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2. Vienna Convention (1988)
The UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (“Vienna
Convention”) was adopted in 1988, and provides the basis for mutual assistance in drug trafficking
cases. The Convention has been ratified by at least 175 countries, and most countries which provide
mutual legal assistance have little difficulty providing assistance in drug cases. Article 5 of the Vienna
Convention requires each State Party to enact domestic confiscation and freezing provisions for proceeds,
instrumentalities and intended instrumentalities of drug offences, and to provide international assistancein these areas. The same article requires that financial records pertaining to such offenses be available todomestic and foreign investigators despite bank secrecy provisions.
Finally, Article 5(a) provides that “proceeds or property confiscated by a Party . . . shall be disposed of bythat Party according to its domestic law and administrative procedures,” and Article 5(b)(ii) encourages thesharing of such confiscated assets with other Parties “on a regular or case-by-case basis” in accordance withdomestic law or any applicable bilateral or multilateral agreements. Thus, although the Vienna Convention
requires the provision of legal assistance such as evidence to other countries, and requires each State Party
to provide for the confiscation of drug-related assets, it does not require that those assets be shared withother countries. 7
3. UN Convention against Transnational Organized Crime (1999)
The UN Convention against Transnational Organized Crime (“UNTOC”) was signed in Palermo, Italy, in
December 2000, and provides for a global response to combat serious international criminal activity, such as
the trafficking in persons, arms and ammunition, and money laundering. This Convention, which has been
ratified by at least 147 countries, also obligates States Parties to adopt domestic regimes to confiscate theproceeds, instrumentalities, and intended instrumentalities of offences covered by the Convention. These
offences include certain specified crimes such as an organized criminal group, money laundering, corruption,
obstruction of justice, and “serious crimes” which are transnational and punishable by imprisonment of overfour years. The Convention also requires States Parties to criminalize the laundering of the proceeds ofcertain listed predicate crimes.
Article 13 of UNTOC governs the obligations of States Parties to each other in confiscation matters. It
requires that the requested country “take measures to identify, trace and freeze or seize proceeds of crime”
as well as instrumentalities “for the purpose of eventual confiscation to be ordered either by the requesting
State Party or . . . by the requested State Party.” Such procedures must not prejudice the rights of “bona fide
third parties.” Like the Vienna Convention, Article 14 provides that confiscated assets be disposed of underdomestic law, but that “if so requested” a State Party should “give priority consideration to returning theconfiscated proceeds of crime or property to the requesting State Party so that it can give compensation to
the victims of the crime or return such proceeds of crime or property to their legitimate owners.” Sharing is
encouraged, as well as contributions to intergovernmental bodies specializing in the fight against organizedcrime. Thus, under UNTOC, use of confiscated assets as restitution to victims of crime is a priority.
4. UN Convention against Corruption (2005)
The UN Convention against Corruption (“UNCAC”), signed in Merida, Mexico, in December 2003,
provides an entirely different, and mandatory, scheme for the recovery and return of corruption proceeds.
In further discussing the G8 and global initiative against grand corruption, this paper will cover theseprovisions in greater detail in a subsequent section. The UNCAC took effect in 2005, and has been ratified
by over 137 States Parties.

7 Like the Vienna Convention, Article 8 of the UN Convention for the Suppression of Financing of International Terrorism(“Terrorist Financing Convention”), signed in 1999 and ratified by 167 States Parties, requires each State Party to enact
provisions for the identification, detection, freezing or seizure, and forfeiture of “any funds used or allocated for the purposeof committing” any of the offenses covered by the Convention. Sharing of forfeited proceeds is again recommended, but not
mandated.

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III. INTERNATIONAL CO-OPERATION LAWS IN THE U.S.
A.	Assistance Available Under U.S. Law for the United States to Assist Foreign Countries to Restrain
and Forfeit Property Located in the United States
Like most countries, the United States may respond to an MLA request to provide confiscation
assistance by either filing its own domestic forfeiture action or by enforcing orders undertaken by therequesting country. The domestic action could be either a civil in rem forfeiture action, or a criminal
forfeiture. Generally, the U.S. case would be a civil forfeiture, particularly if the criminal case is being
prosecuted in the foreign country or not being prosecuted at all.
The United States’ Central Authority for receiving MLA requests is the Department of Justice, Criminal
Division, Office of International Affairs (“OIA”). OIA will receive the MLA request, and submit it for
execution by one or more of the 93 United States Attorney’s Offices (“USAOs”) or another section of the
Criminal Division. If the request is for records or other evidence, it will normally go to a USAO to obtaina Commissioner’s Subpoena from a U.S. district court, which will be served on the party from whom theinformation is sought. If the request is to freeze assets, it will normally go to the Asset Forfeiture Money
Laundering Section (“AFMLS”) of the Criminal Division. AFMLS has the lead responsibility for obtaining
restraints, seizures, or confiscations at a foreign government’s request.
Until a recent adverse decision in the Court of Appeals for the District of Columbia, the Department ofJustice believed it had authority under a provision of 28 U.S.C. § 2467 enacted as part of the USA PATRIOTAct of 2001, to provisionally restrain assets at the request of our treaty partners, either based upon anaffidavit by a law enforcement officer or based upon the enforcement a restraining order issued by a foreign
court. 28 U.S.C. § 2467(d)(3). The foreign order had to be certified by the U.S. Attorney General, and the
conduct underlying the foreign violation had to constitute an offence for which forfeiture would be permitted
under U.S. law.
However, on July 16, 2010, the appellate court in the District of Columbia in the case of In Re: Any and
All Funds or Other Assets in Brown Brothers Harriman & Co. Account # 8870792, et al., -- F.3d --, 2010 WL
2794281 (D.C. Cir. July 16, 2010), No. 09-5065 (“Dantas case”), held that, because of problems with certain
aspects of the statutory language, the provision allowing restraining orders applies only after a foreign
judgment of forfeiture was entered.
This ruling has affected ten restraint cases currently filed in the District of Columbia, involving nearly$500 million. The United States will have to either request a domestic forfeiture restraint based on the filingof an entirely separate U.S. forfeiture action or release the funds. In many of the cases, the U.S. statute oflimitations has run, and therefore filing a domestic case is not possible. In others, because a criminal act did
not occur in the United States, we have no venue to file a U.S. case. Under 18 U.S.C. § 981(b)(4), if there
has been a foreign arrest for certain “foreign predicate offenses” under U.S. law, we can request a 30-day
freeze on assets to give us time to obtain from the foreign government the evidence necessary to file adomestic case, and that period may be extended as necessary. The “foreign predicate offenses” include:arson, fraud by or against a foreign bank, public corruption, arms smuggling, trafficking in persons, narcotics,
and weapons (including nuclear, biological) plus crimes under 18 U.S.C. § 1956(c)(7)(B) (which include
drug trafficking, murder, arson, extortion, explosives, public corruption, fraud by or against a foreign bank,munitions smuggling, human trafficking, child sexual exploitation, child trafficking, and any offence for which
extradition is required by multilateral agreement.
The potential pitfalls with filing a domestic forfeiture action to obtain a freeze or restraint based upon aforeign request are legion. The case would generally be a duplicated trial of the confiscation trial which is
ongoing in the foreign country. Sufficient evidence would have to be produced in English from the foreigncountry for the U.S. court. Under U.S. law, a civil forfeiture case (which these would normally be) generally
requires tracing of the direct criminal proceeds to the property to be forfeited; the U.S. could not restrain
based upon “value-based” foreign forfeiture systems, although it can enforce final judgments entered in such
systems. The expenditures and unreliability of foreign witness travel could result in a dismissal of the U.S.
case, in which case the U.S. government would be liable to pay attorney’s fees to the claimant.
The Dantas court opinion does not affect the United States’ ability to register and enforce a final

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forfeiture or confiscation judgment entered in a foreign country which has an agreement for forfeitureassistance with the U.S. However, the practical effect of the ruling is that there will seldom be such assets
remaining for execution of a final judgment unless the U.S. has filed its own forfeiture action and obtained
restraint.8

B. United States’ Laws Governing U.S. Efforts to Confiscate and Recover Foreign Assets
United States prosecutors have authority to file either domestic civil or criminal forfeiture actions
against property abroad. Under 28 U.S.C. § 1355(b), a civil forfeiture action may be filed against any foreign
property which is subject to civil forfeiture under U.S. law. Case law has established that, in order to provide
the U.S. district court with jurisdiction, the U.S. government must be able to demonstrate that the foreign
government will cooperate in recognizing the forfeiture or in allowing the asset to be transferred to theUnited States.
Under 21 U.S.C. § 853(l) and 18 U.S.C. § 982(b)(1), a U.S. district court can enter any criminal forfeitureorder “without regard to the location of any property” which may be subject to forfeiture. Also, in acriminal forfeiture proceeding, a U.S. court may order a defendant, under 21 U.S.C. § 853(e)(4) to repatriate
any foreign assets to the United States. Such repatriation should occur only if permitted by the foreign
government and if not in violation of any restraining order which the foreign government has enforced onbehalf of the U.S.
Further, if a criminal defendant agrees to plead guilty pursuant to an agreement, the agreement willcontain a provision by which the defendant agrees to repatriate the foreign-based property back to the
U.S. for forfeiture. The plea agreement may also contain a provision by which the defendant agrees to theappointment of a representative in the foreign country to assist in the confiscation and liquidation of theproperty. Also, the United States will often add to an Extradition Treaty request a request that any valuable
property which is found on or near the defendant when he or she is arrested be returned to the UnitedStates with the person.

IV. INTERNATIONAL ASSET SHARING
A. FATF Recommendation 38 and UN Model Sharing Agreement9
Recommendation 38 of the Financial Action Task Force (“FATF”) 40 Recommendations covers
international co-operation: ‘‘There should be authority to take expeditious action in response to requests
by foreign countries to identify, freeze, seize and confiscate property laundered, proceeds from money
laundering or predicate offences, instrumentalities used in or intended for use in the commission of theseoffences, or property of corresponding value. There should also be arrangements for coordinating seizure
and confiscation proceedings, which may include the sharing of confiscated assets.’’
teThis Recommendation basically restates most of the UNTOC requirements, mandating the provision oflegal assistance in the identification, freezing, seizing, and confiscation of the proceeds, instrumentalities andintended instrumentalities of money laundering and predicate offences, and encouraging sharing.10 It also
imposes an obligation to identify, restrain, and confiscate “property of corresponding value.” Unfortunately,in the U.S., without our amended Section 2467(d)(3), we are unable to restrain assets of corresponding
value, which poses an extra burden on our “value-based forfeiture system” partners to trace the proceeds
and instrumentalities of crime to identified U.S.-based assets. The UN Office on Drugs and Crime(“UNODC”) developed a model sharing agreement which was endorsed by the UN General Assembly in
8 The Department of Justice is seeking to obtain an amendment to Section 2467(d)(3) which would address the language

problem relied on by the Dantas court. It is unknown whether, or when, such an amendment will be enacted by the U.S.
Congress.
9 The 40 Recommendations of the FATF provide a set of counter-measures against money laundering covering the criminal
justice system, law enforcement, the financial system, and international co-operation. They are recognized, endorsed, or
adopted by many international bodies, and set out principles for action, while allowing countries flexibility in implementing
those principles. Though not a binding international convention, those countries who have joined the FATF or any regional
styled FATF body have made a political commitment to combat money laundering by implementing the 40 Recommendations.
http://www.fatf-gafi.org
10 Thus, Country A could conceivably freeze and forfeit property at the request of Country B, but keep the proceeds from thesale of the property for its own treasury. This has happened to the United States in several cases.

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December 2005. Some of the suggested language in this model agreement has been adopted by the U.S. in
its most recent bilateral sharing agreements with other countries.

B. U.S. Statutory Conditions for Sharing
Authority for the United States to share civilly or criminally forfeited assets with other jurisdictions isfound at 18 U.S.C. § 981(i).11 Three conditions must be met in order for sharing to occur: (1) the amountand conditions of sharing must be authorized by the Attorney General or Secretary of the Treasury withconcurrence of the Secretary of State; (2) there must be a treaty or an agreement (either case-specific orlong term) between the U.S. and the foreign jurisdiction which authorizes the sharing; and (3) if applicable,
the foreign jurisdiction must be certified by the Secretary of State as having met certain criteria permitting
foreign assistance. Since 1989, well over $250 million has been shared with over 40 jurisdictions from assets
forfeited to the Department of Justice Assets Forfeiture Fund. The jurisdiction requesting sharing musthave facilitated the initial forfeiture by rendering some form of assistance. DOJ and Treasury have the sameinternal guidelines for how the percentage of sharing is determined.12
The United States does not generally share where there are identified innocent owners or victims ofthe crimes underlying the forfeiture. Instead, we will endeavour to return the forfeited assets to innocent
owners and victims either though our remission process or by taking advantage of a similar process in aforeign country.

V. GLOBAL IMPERATIVE FOR RECOVERY OF CORRUPTION PROCEEDS:INTERNATIONAL “KLEPTOCRACY” INITIATIVE
A. International Agreements to Combat Corruption, the G8 Initiative, and StAR
The term “kleptocracy” is derived from the Greek “kleptes” and “kratos”, meaning rule by thieves.
Thus, it is applied to a government which uses corruption to extend the personal wealth and power of thegovernment officials and the ruling class. As noted by Attorney General Holder in Uganda, corruption
accounts for at least $1 trillion, or over 3% of the world’s Gross Domestic Product (“GDP”), each year.
This number is even higher for members of the African Union, where up to 25% of the GDP is estimatedto be lost to corruption.13 A number of multilateral agreements have been enacted over the years to enablejurisdictions to assist each other in fighting and recovering the proceeds of corruption, such as the InterAmerican Convention Against Corruption and the OECD Convention on Combating Bribery of Foreign
Public Officials (both signed in 1997), the European Union Convention on the Fight Against Corruption of
1995, and the African Union Convention on Preventing and Combating Corruption of 2004. Despite these
agreements, the obstacles to investigating and prosecuting kleptocracy cases have persisted.
In May 2004, in conjunction with the anticipated effective date of UNCAC, the G8 issued a Justice andHome Affairs Ministerial Declaration calling on all governments to prioritize the recovery of corruption
assets for victim states. As part of an effort to combat corruption, or at least to deprive the kleptocrat andhis family of the enjoyment of the stolen assets, the G8 committed to developing joint teams of forfeiturerelated MLA experts to send to victim states, co-ordination task forces to work with victim states on MLA
requests, and workshops to exchange information and best practices. The projects and publications of theWorld Bank StAR initiative are designed to help accomplish these stated goals.
11 Duplicate provisions are found at 21 U.S.C. § 881(e)(1)(E) (for criminal and drug forfeitures) and 31 U.S.C. § 9703(h) (forDepartment of Treasury forfeitures).

12 For “essential assistance,” 50% or more of the amount forfeited can be shared. For “major assistance” between 40 and 50%

can be shared and for “facilitating assistance,” the amount would be up to 40%.. Essential assistance can involve a country’s
waiving its own forfeiture action, repatriating the assets without needing a signed letter from the defendant, providing virtually
all of the evidence for forfeiture, or defending litigation in that country connected with the forfeiture. Major assistance may
consist of enforcing a U.S. forfeiture order in order, freezing assets at the request of the U.S., repatriating assets with an
extradited defendant, or expending substantial law enforcement resources to obtain the forfeiture. Facilitating assistance may
involve the provision of bank or financial records, giving of intelligence information, providing service of process for witnesses
or facilitating witness interviews.
13 “Stolen Asset Recovery (StAR) Initiative: Challenges, Opportunities, and Action Plan”, UNODC/World Bank Group,
published June 2007, at p. 9.

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B. Implementation of UNCAC
UNCAC’s mandatory asset recovery provisions entered into force in December 2005 as the first legallybinding global anti-corruption agreement. UNCAC makes it clear that Asset Recovery is a major mission of
the agreement – all of Chapter V is dedicated to this “fundamental principle of” the Convention, for which
States Parties must “afford one another the widest measure of cooperation and assistance” (UNCAC, Art.
51).
Articles 14, 23 and 31 provide requirements for the domestic regimes of States Parties to detect
identify, freeze, seize and confiscate the proceeds, commingled proceeds, instrumentalities, and intended
instrumentalities of corruption. Article 53 mandates provisions for the direct recovery of corruption assets,
including laws permitting private civil causes of action to recover damages owed to victim states andthe recognition of a victim state’s claim as a legitimate owner of stolen assets. Article 54 requires States
Parties to give effect to any confiscation order for corruption proceeds issued by another State Party, andto “consider taking such measures as may be necessary to allow confiscation [. . .] without a criminal
conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or inother appropriate cases.” Although stopping short of requiring non-conviction based forfeiture, UNCAC
recognizes that in cases of corruption, the criminal kleptocrat may not always be available for criminal
prosecution. States Parties must be able to freeze or seize corruption assets based upon an order issued
by another State Party and upon an MLA request which provides “a reasonable basis for the requested
State Party to believe that there are sufficient grounds for taking such actions and that the property
would eventually be subject to an order of confiscation”. Similar assistance must be given to a final orderof confiscation under Article 55. Article 55 ¶ 7 provides that co-operation may be refused if necessary,
sufficient and timely evidence is not received, or if the property is of minimal value. Finally, Article 57
mandates a return of confiscated embezzled or laundered public property to the requesting State Party.
UNCAC also requires that financial institutions of the States Parties strengthen their ability to detect andfreeze corruption-related assets. Most of these mandates require methods to determine the true beneficial
ownership of accounts being used to conceal corruption proceeds.

C. Case Studies: Abacha and Fujimori/Montesinos
Two pre-UNCAC cases of grand corruption resulted in significant recoveries of assets for two victim
states – Nigeria and Peru. Both cases provide examples of successful collaboration between financial sector
jurisdictions and the states which were victimized by their kleptocrat leaders which led to the recovery andreturn of hundreds of millions of dollars of stolen assets.
1. General Sani Abacha (Nigeria)
General Abacha governed Nigeria from 1993 to 1998, dying in June 1998 of an ostensible heart attack.
He is reported to have looted from $3 billion to $5 billion from the Nigerian national treasury during his
five years in office. Subsequent to Abacha’s death, Nigerian investigators determined that he had obtained
property through outright theft from the Nigerian treasury through the central bank, inflation of the value of
public contracts, extortion of bribes from contractors, and fraudulent transactions. The funds were launderedthrough “a complex web of banks and front companies in several countries, but principally Nigeria, the UK,
Switzerland, Luxembourg, Liechtenstein, Jersey, and the Bahamas.”14
In excess of $800 million was recovered in Nigeria from Abacha’s family and associates. Abacha’s
successor, President Olusegun Obasanjo, hired a Swiss legal firm to help trace and recover funds held
abroad. Nigeria sent an MLA request to Switzerland, which then immobilized over $500 million in
Swiss bank accounts. After several years, Switzerland was able to waive the usual requirement of a final
confiscation order from the foreign jurisdiction, as Nigeria was simply not able to produce one under its legal
regime at the time. The Abacha family delayed Nigeria’s recovery for over five years with various motions
and appeals. However, finally the World Bank was selected as a monitor for the recovered assets, and in late2005 and early 2006, $505 million was repatriated. An additional $106 million was repatriated from Jersey.
The World Bank monitored Nigeria’s use of the funds, insuring that they were used for the welfare of the
public in areas such as rural infrastructure, health and education.
14 “Stolen Asset Recovery (StAR) Initiative: Challenges, Opportunities, and Action Plan”, UNODC/World Bank Group,

published June 2007), at p. 18.

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2. President Alberto Fujimori and Intelligence Police Chief Vladimiro Montesinos (Peru)
During his ten years as president of Peru, Alberto Fujimori and his intelligence police chief, Vladimiro
Montesinos, methodically bribed judges, politicians, and the media. However, on September 14, 2000,
Fujimori lost control of the media when a television station broadcast a video showing Montesinos giving a
Peruvian Congressman a $15,000 bribe. Investigations followed, leading to Fujimori’s resignation, flight toJapan, and his later 2007 arrest in Chile and extradition to Peru. Fujimori was convicted in Peru on charges
of human rights violations, embezzlement, and bribery, and he is serving a combined term of 25 years
imprisonment.
Montesinos had known connections to Colombian drug traffickers, and was involved with arms trafficking
for the benefit of the Colombian terrorist group, the FARC. In 2001, he was arrested in Venezuela, andextradited to Peru, where he was convicted on charges of embezzlement and official corruption, receiving
a combined sentence of 20 years’ imprisonment. The first repatriation of Montesinos’ corruption proceeds
came sui generis from Switzerland in 2002 in the amount of $77.5 million, based upon clear and convincing
evidence that the funds represented bribes paid on Russian arms deals. Also, the Swiss made spontaneous
disclosures to Peru of other suspicious transactions, invited the Peruvian government to submit an MLA
request to freeze additional funds, and later repatriated over $50 million in additional funds.
In the United States, suspicious transaction reports filed with FinCEN indicated additional funds at
the Miami branch of the Pacific Industrial Bank. Approximately $20 million connected with Montesinos’
associate, Venero Garrido, were frozen in Florida and California in two civil forfeiture actions. Venero wasarrested in Miami and extradited to Peru, and Peruvian authorities were able to document the funds frozen
in the U.S. as bribes received by Venero from fraudulent schemes connected with the Peruvian Military
Pension Fund. These funds were forfeited in the U.S. and returned to the government of Peru. Additional
funds of $33 million appeared to be held at the Pacific Industrial Bank in Cayman Islands; however, theCaymans provided sufficient documentation and co-operation for Peruvian authorities to eventually
determine that although the tangled web of financial transactions made it seem that the funds had beentransferred there, they were physically still located in a Peruvian bank.15 Thus, within a five year period, asa result of commendable co-operation by several countries, Peru recovered over $180 million in corruption
proceeds.16

VI. CONCLUSION
Despite the major gains achieved in recent years in the global recovery of criminally-derived assets,much remains to be done. Jurisdictions must conform their domestic legislation to their international
treaty obligations. Through institutions such as the UNODC, the StAR Initiative, and the Basel Institute on
Governance, efforts are being made to provide training and other resources to nations with developing AML
and anti-corruption regimes.
Recovery of corruption proceeds is fraught with barriers not necessarily present in other types ofcriminal cases. Differences in legal systems and the resources needed for endless court challenges by the
kleptocrat’s family and associates increase the difficulty. However, armed with ever evolving legal andtechnological tools, investigators, prosecutors, and judges will hopefully be increasingly more effective incombating international organized crime and political corruption. At a minimum, if at least some of that 3.5%of the world’s GDP can be redirected to the vast needs of world’s poor and underfed, then our efforts will
not have been in vain.

15 “Peruvian Efforts to Recover Proceeds from Montesinos’ criminal network of corruption,” Guillermo Jorge, (September2007), ¶¶ 14, 26, 50-76 http://www.baselgovernance.org.

16 “Stolen Asset Recovery (StAR) Initiative: Challenges, Opportunities, and Action Plan”, UNODC/World Bank Group,

published June 2007), at p. 20, 25 (also noting that the repatriated funds were deposited to a special fund called FEDADOI,
which was established to ensure the transparent use of the recovered assets; however, the resources ended up supplementing
the budgets of institutions with members on the FEDADOI board).

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