Rahman Ravelli
Rahman Ravelli Solicitors Logo
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539

About Us Expertise PEOPLE International Legal Articles News Events Contact Us toggle button for phone toggle button for search
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
search
Rapid Response Team: 0800 559 3500
Switchboard: +44 (0)203 947 1539
search

FATF’s revised recommendations on global asset recovery

Author: Niall Hearty  6 December 2023
2 min read

Niall Hearty of Rahman Ravelli outlines the Financial Action Task Force amendments relating to confiscation of criminal assets

The Financial Action Task Force (FATF) has produced amended recommendations in an effort to ensure that confiscation of the proceeds of crime keeps pace with the volume of criminal assets in the global financial system.

The amendments aim to give extra powers to law enforcement agencies, financial intelligence units, prosecutors and other asset recovery practitioners and authorities for use in targeting and confiscating criminal assets.

FATF said the changes will provide “a more robust toolkit to target and confiscate criminal assets.’’

It added: “Criminals are able to move assets quickly and easily across borders with the aid of technology. These revised recommendations will help countries respond to the speed of criminal activity and equip them to succeed by introducing new tools, closing loopholes, and emphasising actions to target and capture criminal proceeds at the opportune moment.’’

The amendments follow a 2022 FATF meeting where ministers agreed that more needed to be done if the confiscation of the proceeds of crime was to meet the scale of the problem. FATF made improving asset recovery outcomes a priority. As a result, it has made the first significant change to its asset freezing, seizure, confiscation, forfeiture and associated international cooperation recommendations since the standards were first developed in 1990.

Priority

The new regime requires countries to establish asset recovery as a priority at both the domestic and international level, and periodically review their confiscation policies and operational frameworks. Countries must also coordinate and share information internally in order to identify criminal property.

Perhaps what is most notable about the amendments is that FATF now expects countries to establish a non-conviction-based confiscation regime in their legal systems that is consistent with fundamental principles of domestic law. FATF has stated that such regimes have proved to be effective when criminal prosecution is unlikely or impossible; especially regarding money laundering that it is linked to corruption.

Extended confiscation of criminal assets is also being made a mandatory part of FATF members' legal systems, with some jurisdictions having already introduced such regimes. FATF is now requiring members to have in place stronger tools to temporarily freeze, seize and restrain suspected criminal property in the early stages of an investigation; including the power to suspend or withhold consent for transactions and freeze and seize assets rapidly to prevent their dissipation.

In recognition of the cross-border nature of money laundering investigations, FATF now expects countries to recognise each other's preliminary and final court orders relating to assets that are subject to confiscation.

Amendments have also been published relating to Recommendation 8, regarding the misuse of non-profit organisations for terrorist financing. FATF has expressed its anxiety regarding some jurisdictions applying disproportionately strict measures to non-profit organisations (NPOs), including designating them as money laundering reporting entities or requiring they carry out customer due-diligence. FATF now requires countries to identify those NPOs that are at high risk of abuse and put in place proportionate measures to address those risks.

Significant

FATF President, T. Raja Kumar, stated: “FATF members have delivered the most significant reforms on the recommendations related to asset recovery in decades. The amendments will provide countries with a range of new and enhanced tools to more effectively freeze, seize, and confiscate criminal property, and cooperate with each other.

“It is now up to countries to make that major mindset and culture shift a reality and prioritise asset recovery as a key pillar of their national crime prevention and criminal justice strategy.’’

Niall Hearty C 07998

Niall Hearty

Partner

niall.hearty@rahmanravelli.co.uk
+44 (0)203 910 4565 vCard

Download Profile PDF

View Profile

Niall has a wealth of corporate crime expertise and an ability to coordinate global bribery and corruption cases. His achievements in such investigations have made him a logical choice for corporate clients.

Share this page on