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New GAFILAT guide: Why asset recovery laws need to align with human rights and other international standards
A new guide to non-conviction based forfeiture published by GAFILAT, the Latin American body of the Financial Action Task Force FATF sets out good practices for this powerful but under-used form of asset recovery legislation. It also emphasises the need for laws to align with both domestic constitutions and international human rights standards. The GAFILAT guide was drafted by Oscar Solórzano in collaboration with the region’s Asset Recovery Network RRAG . Oscar is Head of Latin America at the Basel Institute on Governance and a Senior Asset Recovery Specialist with many years of experience supporting government partners across Latin America in high-profile, complex cases of corruption and asset recovery. In this Q&A, he explains the approach, relevance and impact of the Guía de Buenas Prácticas sobre Extinción de Dominio y Decomiso no Basado en Condena , which was published by GAFILAT in 2024 and financed by EU member states through the COPOLAD III cooperation programme. COPOLAD III is a consortium led by the Italo-Latin American Association IILA and FIIAPP of the Spanish Cooperation. 1\. What is the guide about and who is it for? This is a guide to good practices in non-conviction based forfeiture for Latin America. It analyses the existence and implementation of non-conviction based forfeiture mechanisms in the 18 GAFILAT countries, which provided useful data during the drafting process and very detailed comments during the review. The guide contains an analysis of economic criminality in Latin America and the public policy response. It also addresses the essential concepts and standards applicable to non-conviction based forfeiture, presents case studies and explores available data from GAFILAT countries. Policymakers, legislators, law enforcement and judicial practitioners, law students and civil society – including journalists who report on these complex topics – will benefit from the guidance. 2\. Why is there a need for guidance? The expansion of non-conviction based forfeiture legislation has accelerated in Latin America in recent years, and not necessarily in the most coordinated or harmonised way. In line with the updated FATF standards relating to asset recovery, it is expected that it will continue to expand in the region. In effect, the FATF’s updated Recommendations 4 and 38 make the adoption of non-conviction based forfeiture laws mandatory and seek to ensure that decisions based on these laws can be enforced internationally. The guide therefore appears at an ideal time. It proposes a way to harmonise this type of law while respecting the legislative diversity that exists in the region. 3\. The idea is that non-conviction based forfeiture can reduce economic and organised crime – even without the threat of criminal convictions. Can you justify that? Economic crimes are perpetrated for the purpose of obtaining illicit economic advantages. Laws that reduce such economic advantages are a concrete step forward. And jurisdictions with more powerful and varied legal tools are more likely to see their crime rates decrease, simply because there is a concrete societal response to the criminal phenomenon. Without comprehensive asset recovery laws and an effective judicial apparatus to implement them, various incentives for engaging in profitable criminal activity arise. Some studies show that the lack of effective legal mechanisms targeting criminal assets has, among other things, allowed an explosion of organised and economic crime in Latin America in all its manifestations. The same goes for the growth of public-sector corruption. Assets stolen through corruption have rarely been confiscated in the past, when asset recovery was only possible in the context of criminal proceedings. It is naïve to think that a legislative instrument alone can change the reality of crime in Latin America, where the most fearsome drug cartels operate and, according to all international indices, corruption is rampant from north to south. However, the empirical experience I have gathered while working for almost 15 years in this part of the world indicates that there is a positive difference in the criminal situation of countries that effectively implement asset recovery mechanisms. A robust legal toolkit for asset recovery also alters the behaviour of criminal organisations, which have to bear higher costs to develop more sophistication in their criminal activities or simply relocate their activity to jurisdictions less equipped with legal tools and the ability to wield them. In Peru, to take a positive example, non-conviction based forfeiture is proving a powerful way to get at numerous politicians who have been accused of corruption, but where criminal proceedings seem to be never-ending. The independence of Peru’s non-conviction based forfeiture law from criminal procedures allows prosecutors to target assets even if their owners inevitably slip through the nets of justice. 4\. What does the guide show about the prevalence and success of different forms of non-conviction based forfeiture in the region? On paper, there has been a lot of progress in the adoption of non-conviction based forfeiture in Latin America. Only two countries in the region do not have any form of non-conviction based forfeiture law. The most predominant form is arguably Extinción de dominio, which has existed for 13 years. Ten out of the 18 countries have incorporated it into their legal arsenals and apply it in various forms and degrees. Extinción de dominio is a flexible law that can operate in civil, criminal or administrative matters, or even completely independently. It has developed specific concepts that make it possible to broaden the grounds for asset forfeiture. It lists an extensive catalogue of rights of the defence which, as stated in the Guide, seem to go far beyond the internationally established standard. In practice, however, recovery rates remain modest in relation to the volume of criminal assets generated in and flowing through the region. The best practices guide argues that a lack of effective implementation of existing laws partially explains the poor performance. The quality of implementation is influenced by political, economic and social interests. These are not necessarily addressed in the guide, which limits itself to technical and legal issues. However, the guide proposes some concepts and comparative practices that have the modest objective of guiding national authorities in applying this indispensable tool. 5\. What are success factors and challenges? In many Latin American countries, non-conviction based forfeiture is only taking its first baby steps. But from a Darwinian perspective of law – i.e. survival of the fittest – I observe that the laws that thrive are those that align with international standards and the constitutional rights of the countries that adopt them. In other words, those laws that develop around recognised global standards and practices but that are also designed to work in specific local contexts. Since 2020, together with my colleagues and many passionate and competent local partners, I have implemented programmes promoting non-conviction based forfeiture laws in the region. That experience has helped me to see that there is a group of countries that have what we can call a “European” approach to the issue, and whose laws apply only in a narrow set of scenarios. Others have more hard-hitting practices that evoke the laws used in countries such as the United States, and have transposed common law practices and principles into civil law frameworks without further reflection. Despite an increase in asset recovery rates, in many cases this has led to distortions and challenges, which are partially explored in the guide. 6\. What does the guide tell us about non-conviction based forfeiture in international cases? International asset recovery is a very different animal from domestic asset recovery and has political implications. That said, since 2014 several Latin American countries have tried to pierce the once impenetrable veil of the European financial system with non-conviction based forfeiture procedures. Switzerland and then Luxembourg were the first European countries to accept these laws as valid, in particular in relation to decisions based on Extinción de dominio. Today, almost all countries accept provisional measures based on these laws and some can directly enforce the resulting decisions. Even if the practice of enforcing non-conviction based forfeiture judgments is not abundant, we hope that the new standards adopted by the FATF on this matter will help to accelerate international asset recovery. 7\. The guide emphasises the need to align laws with international human rights standards. Why? In my opinion, this is fundamental. It is inconceivable that the ideals of justice can be achieved to the detriment of human rights. Rather than a random matter left to the discretion of states, respecting human rights in the adoption of non-conviction based forfeiture laws is an international treaty obligation. Most countries adhere to the so-called control of conventionality doctrine, i.e. the obligation to align any domestic legal instrument or practice with binding rules arising from international treaties such as the American Convention of Human Rights. This presupposes that the adoption of any domestic rule and practice on non-conviction based forfeiture must respect human rights and the practice of human rights courts. This is a condition sine qua non of any asset recovery law. The guide cites two examples of setbacks to the use of non-conviction based forfeiture laws in the region on the basis of human rights deficits. We can agree or disagree with the premises used by the countries’ High Courts to reach their conclusions. But what is clear is that a lack of consideration for human rights can also play a paralysing role. This challenge is vividly illustrated in Peru right now, where the Ombudsman has filed a claim against the use of non-conviction based forfeiture with the Constitutional Tribunal on the grounds that it could violate the right to property and the principle of the presumption of innocence. On a more positive note, a human rights lens can enhance the application of this type of law, especially in the context of international cooperation. On the one hand, more attention to human rights brings more legitimacy and acceptance to laws and therefore better recovery rates. On the other hand, a human rights lens also offers national legislators the ability to adopt more incisive standards when there are, for example, elements of organised crime or other exceptional conditions that make the application of some human rights more flexible. 8\. How does the guide help navigate the human rights topic in practice? As the guide explains through a study of the jurisprudence of the European Court of Human Rights, the issue is constantly evolving. The guide provides Latin American legislators and practitioners with examples of how to develop the human rights approach in a clearer way and enables them to critically review concrete non-conviction based forfeiture cases in various parts of the world. It emphasises two human rights that are central to non-conviction based forfeiture: the right to property and the right to a fair trial. This will be enormously beneficial in ensuring that new or revised non-conviction based forfeiture laws in Latin America are in line with the updated FATF Recommendations. The guide advocates for the adoption of laws that are in harmony with human rights principles and specifies that their international enforcement is a recognised standard. Similarly, the interpretative notes to the revised FATF Recommendations 4 and 38 – and the very coherence of the FATF system – indicate that the respect for human rights is fundamental to the adoption and application of these laws. The human rights perspective is likely to be an important element in the forthcoming fifth round of FATF Mutual Evaluations in GAFILAT countries, where the technical compliance and effectiveness of these laws with FATF standards will be under the microscope. Learn more See the Guía de Buenas Prácticas sobre Extinción de Dominio y Decomiso no Basado en Condena . Read a related blog by Oscar Solórzano: FATF seeks to change the landscape of international asset recovery: what this means for Latin America.
Asset forfeiture laws in Latin America: agreeing a human rights focus and more
At a regional meeting of legal practitioners, politicians and academics from selected Latin American countries and Spain, participants converged on the need for a strong human rights focus in non-conviction based forfeiture NCBF laws – laws that allow the confiscation of assets without a criminal conviction. A key takeaway from the two-day meeting was that procedural rights and the right to property enshrined in human rights instruments are essential elements of NCBF laws in Latin America and elsewhere. This is not least because detractors of such laws often claim they are unconstitutional on the grounds that they violate these rights. The detractors’ claims do not hold true: cases from Peru for example, such as the Russian arms dealer case and the terrorist financing case of The Nun La Monja , demonstrate clearly that such laws can be applied with proportionality and in full respect of the rights of the defendants. As our Head of Latin America and Senior Asset Recovery Specialist Oscar Solórzano has argued in other high-level fora, a human rights-based approach to developing and implementing NCBF laws will help to fireproof them against claims of unconstitutionality. It will also help guide decisions on when and where to apply NCBF provisions. These safeguards will enable countries to design and implement sustainable NCBF mechanisms that achieve their purpose – enabling the State to recover illicit assets – and are accepted as legitimate by citizens, politicians and courts. Sharing experiences The meeting in Lima, Peru, brought together practitioners primarily judges, magistrates, prosecutors , politicians including deputy ministers and other high-level representatives from Chile, Brazil and Colombia. Other experts attended from Spain, Peru and Costa Rica. Takeaways included: Of the different models of NCBF that exist in the region, the one most aligned with the human rights focus is the extinción de dominio model adopted by countries including Argentina, Bolivia, Colombia, Ecuador, Mexico, Peru, as well as some Central American countries. Lessons learned from the application of extinción de dominio laws are useful in implementing other models of NCBF law, such as a law dealing with administrative misconduct improbidad administrativa in Brazil or the proceeds of organised crime law of Costa Rica capitales emergentes . The human rights approach revolves around three basic criteria: supremacy no other law can contradict it ; universality it applies to everyone ; and practicability it is viable and demonstrated as such by practice and case law . The issue of international judicial cooperation in transnational NCBF cases needs more attention. Besides Peru several cases and Colombia one case , no other country has reported to have enforced these laws internationally. There was a strong consensus that the decade-old NCBF Model Law, and most of the laws have that have followed that model, do not adequately address the complexity of international cooperation in cases of asset confiscation. Asset management is the weakest link in the value chain of asset recovery as a public policy. Even in countries such as Colombia that have extensive experience in asset management, this issue needs more attention. The development of a legal framework could improve efficiency in the administration of seized and forfeited assets. This is important to avoid depletion of the State's resources when asset recovery takes place. The agenda was specifically designed to facilitate discussion between countries with significant successful experiences in such laws such as Colombia and Peru and those currently lacking robust laws such as Brazil and Chile . About the meeting This first regional meeting is part of an ambitious programme to help increase the capacity of countries in Latin America, Sub-Saharan Africa and Lusophone countries to recover stolen assets through effective, appropriate NCBF legislation. Ten partner countries are involved in the two-year programme, which is funded by the Bureau of International Narcotics and Law Enforcement Affairs INL of the US Department of State. Learn more in English, en español and em português. Following the two-day meeting, many of the participants attended a National Convention for Prosecutors Specialised in Extinción de Dominio, hosted by the Basel Institute-led Programa GFP Subnacional. The meeting and this news release are a gift of the United States Government and funded by a grant from the United States Department of State. The opinions, findings and conclusions expressed are those of the authors and do not necessarily reflect those of the United States Department of State.
Latin America’s model law on non-conviction based forfeiture of illicit assets turns 10 – what now?
A model law on non-conviction based forfeiture NCBF , drafted 10 years ago by UNODC to support countries in Latin America in their efforts to recover stolen assets, will be updated following four days of intense discussions among practitioners and asset recovery experts from across the continent. Specialists from our International Centre for Asset Recovery ICAR team in Latin America were among those contributing to the discussions of the NCBF Model Law Ley Modelo de Extinción de Dominio . Extinción de Dominio is the dominant form of NCBF mechanism in Latin America, including in Peru, where ICAR is assisting the authorities in rolling out a national system for NCBF and has seen some encouraging successes. A model for NCBF laws across Latin America Central to the participatory review process of the NCBF Model Law, the meetings sought to illuminate its contribution to efforts to recover stolen assets in countries that have implemented such an NCBF mechanism. Speakers highlighted that the Model Law has served as a reference document for many countries in drafting NCBF legislation that fits their domestic legal systems and contexts. These laws have since helped to recover assets arising from organised crime and corruption. The discussions also highlighted good practices and aspects that require updating in line with the fast-evolving field of asset recovery, such as how to recover assets held in the form of cryptocurrencies, and evolutions in international judicial cooperation. Other key points included issues the possibility of extending international instruments, such as the Inter-American Convention on Mutual Assistance in Criminal Matters, to specifically include forms of NBCF. Participants called for more guidance on developing suitable mechanisms to manage seized and confiscated assets, as well as on procedural aspects specific to this type of law. These are areas in which countries that are further ahead in the implementation of Extinción de Dominio mechanisms can usefully take the lead. Sharing on-the-ground experiences with NCBF laws Oscar Solórzano, the Basel Institute’s Head of Latin America and Senior Asset Recovery Specialist, presented some practical case studies that demonstrate the challenges of international judicial cooperation in asset recovery. On the other hand, he pointed to encouraging experiences of such international cooperation from Peru, which has succeeded in recovering assets from abroad using its 2019 Extinción de Domino law see case links below . Oscar also remarked positively on the progress made by some European jurisdictions in recognising the validity of this model of NCBF legislation. Dennis Cheng, Senior Asset Recovery Specialist, moderated a panel reflecting on the significant advances made in Latin America in respect of NCBF over the last 10 years and participated in the closing session. Promoting innovation in asset recovery Participants in the four-day meeting included prosecutors, judges, academics and policymakers from Argentina, Bolivia, Brazil, Chile, Colombia, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, Paraguay and Peru. Many of these are leading voices in the asset recovery field who are also involved in the Asset Recovery Knowledge Community established by ICAR earlier this year. It is hoped that the reflections and knowledge products emerging from the Asset Recovery Knowledge Community will support the legal foundations of the NCBF Model Law as it is revised over the coming months, as well as its application in practice. Learn more See the UNODC press release: UNODC conmemora los diez años de la Ley de Modelo de Extinción de Dominio. Encouraging cases based on Peru’s 2019 Extinción de Dominio law include the Ibárcena case involving a deceased Navy General, the Russian arms dealer case, the military aircraft case of Moshe Rothschild Chassin, and the recent terrorist financing case of The Nun La Monja . A comprehensive description of all cases can be found in the 1,100-page Compendium of Jurisprudence on Extinción de Dominio published in July by Peru’s Procuraduría General del Estado.
First meeting of the Asset Recovery Knowledge Community in Latin America explores international cooperation in cases of non-conviction based forfeiture
Twenty-five practitioners from 12 countries gathered online on 29 June for the first virtual meeting of the new Knowledge Community on Asset Recovery in Latin America. An initiative of the Basel Institute’s International Centre for Asset Recovery, the regional Knowledge Community provides a collaborative space for interaction between leading practitioners in the field of asset recovery and international judicial cooperation in criminal matters. The purpose is to develop a critical mass of knowledge on asset recovery, with an emphasis on non-conviction based confiscation, and to disseminate this knowledge among both members and the wider asset recovery community. Ultimately, the knowledge should help countries to improve their capacity to recover stolen assets by introducing novel legal tools into their legislative systems and implementing them more effectively. Lessons learned from international cooperation over the “Nun” case At this inaugural session, practitioners discussed a case study illustrating how Peru had applied its non-conviction based forfeiture legislation, extinción de dominio , to achieve a confiscation order for assets intended to fund the Shining Path terrorist organisation. Oscar Solórzano, Senior Asset Recovery Specialist and the Basel Institute's Head of Latin America as well as the case study’s author, explained the challenges of obtaining mutual legal assistance and how they were overcome in this precedent-setting case. The detailed case study is available here: Case study: The Nun – Confiscating assets of the Shining Path terrorist organisation Estudio de caso: La monja – Decomisando los activos de la organización terrorista Sendero Luminoso Setting the foundations for future events The session also saw the presentation of the Knowledge Community Steering Committee members, plus an overview of the Community’s plans for the rest of 2021.
Publications
La capacidad de Chile para recuperar activos ilícitos: Un diagnóstico conforme a los 9 principios de la recuperación de activos
Este diagnóstico tiene el propósito de contribuir a la mejora continua de las capacidades de los Estados beneficiarios en la recuperación de activos ilícitos originados en la perpetración de crímenes graves como la corrupción, el lavado de activos, el tráfico ilícito de drogas, entre otros.
De manera secuencial, este diagnóstico valora la capacidad de respuesta institucional y legislativa que los Estados implementan para enfrentar el fenómeno de la delincuencia financiera y el flujo de activos ilícitos. En ese sentido, se examina la cadena de valor de la recuperación de activos implementada en Chile, sobre la base de las reglas adoptadas por las organizaciones encargadas de determinar los estándares internacionales.
No obstante, este diagnóstico no pretende ser exhaustivo. Por el contrario, se presenta como un documento de trabajo que ofrece un panorama general de la problemática de la recuperación de activos en Chile.
El diagnóstico está dividido en dos capítulos principales.
- El primero describe el marco institucional y las principales prerrogativas que Chile prevé en el marco del proceso de recuperación de activos.
- El segundo capítulo valora el marco jurídico e institucional en función de los nueve principios relativos al proceso de recuperación de activos y los estándares internacionales en la materia.
Finalmente, una parte conclusiva acompaña a este diagnóstico.
Este diagnóstico ha sido desarrollado en el marco del Programa “Apoyando a las partes interesadas en la adopción del decomiso sin condena como herramienta para la recuperación de activos”, financiado por la Oficina de Asuntos Internacionales de Narcóticos y Aplicación de la Ley (INL) del Departamento de Estado de EE. UU.