Those of us dedicated to fighting financial crime were excited to see the Council of Europe’s recent adoption of an Additional Protocol to the Warsaw Convention, an international treaty on the prevention and control of money laundering and terrorist financing.

The Protocol, together with the Warsaw Convention, arguably represents one of the most advanced treaty frameworks on asset recovery. It elevates practices developed in more advanced jurisdictions into binding commitments and raises the baseline for all participating states.

It also requires states to rethink their approach to anti-money laundering and asset recovery in several important respects. Among others, it:

• places greater emphasis on financial investigations;
• strengthens the institutional architecture supporting asset recovery;
• obliges states to significantly improve their ability to cooperate in cross-border cases.

To achieve these objectives, it introduces a range of operational measures designed to facilitate the tracing, freezing, management and recovery of criminal assets. These include dedicated asset recovery bodies, centralised account registries and enhanced mechanisms for information sharing and international cooperation.

This short explainer highlights some of the points that we, at the Basel Institute, find most important and potentially impactful based on two decades of experience of our International Centre for Asset Recovery supporting jurisdictions around the world on anti-money laundering and asset recovery.

Why the new Protocol?

The 2005 Warsaw Convention – formally the Convention on Laundering, Search, Seizure, and Confiscation of the Proceeds from Crime and on the Financing of Terrorism – establishes a comprehensive framework for anti-money laundering and asset recovery.

It requires its 39 States Parties to implement anti-money laundering measures, including customer due diligence, suspicious transaction reporting and Financial Intelligence Units. It also requires them to cooperate internationally to identify, trace, freeze, seize, confiscate and return criminal assets.

The need to modernise the Convention and respond to evolving forms of illicit finance, digital assets and the increasingly rapid movement of assets across borders drove the adoption of the new Protocol.

The Protocol seeks to ensure consistency with emerging international and regional standards, including the Financial Action Task Force Recommendations. It also seeks to make advanced asset recovery mechanisms developed within the European Union framework available across the wider Council of Europe space, which includes 46 European states.

Connecting financial intelligence with asset recovery and management

The Protocol’s main innovation lies in the integration of Financial Intelligence Units, Asset Recovery Offices and Asset Management Offices into a coherent institutional architecture. The integration is designed to support rapid intervention, effective asset tracing and management, and cross-border cooperation.

By doing so, it strengthens the role of non-law enforcement actors in tracing, safeguarding and preserving the value of assets.

First, under the Protocol, States Parties are required to establish Asset Recovery Offices with powers to trace assets, cooperate directly with foreign counterparts and take immediate action to preserve assets, including crypto, in cross-border cases.

Second, States Parties are also required to establish Asset Management Offices responsible for managing frozen and confiscated property and for cooperating with domestic and foreign authorities.

Third, the Protocol also strengthens the operational role of Financial Intelligence Units in asset recovery by requiring states to grant them powers to temporarily suspend transactions, accounts and business relationships. Many jurisdictions already permit the temporary suspension of suspicious transactions. However, FATF standards do not require Financial Intelligence Units to have such authority.

In practice, these reforms recognise that anti-money laundering and asset recovery are closely interconnected. Early intervention significantly increases the chances of successful asset recovery at both domestic and cross-border level.

They also emphasise that asset value must be preserved from freezing to disposal. Achieving this requires empowering specialised authorities responsible for financial intelligence, asset tracing and asset management.

Streamlining access to asset and ownership data

The Protocol requires the establishment of centralised account registries capable of identifying bank accounts, payment accounts, securities accounts, safe deposit boxes and crypto accounts, along with their beneficial owners and any persons authorised to act on behalf of account holders. Financial Intelligence Units, Asset Recovery Offices and other competent authorities are explicitly granted access to these mechanisms.

This creates a dedicated infrastructure for locating assets within a jurisdiction. It also allows the exchange of such information between authorities in cross-border cases.

While centralised bank account registries already exist in many jurisdictions, they are far from universal. Moreover, where such systems do exist, they have traditionally focused on bank account information and often do not extend to other forms of financial holdings, such as securities accounts, safe-deposit boxes or crypto accounts.

In practice, this addresses a major operational bottleneck. Identifying accounts usually requires multiple requests to banks and other institutions, which increases the length of financial investigations. Centralised registries significantly improve operational efficiency by accelerating asset tracing and reducing the risk of asset dissipation before authorities can act – an approach now being extended to volatile asset classes such as cryptocurrencies.

Maximising the value of financial investigations

The Protocol establishes a comprehensive framework to prioritise and enhance asset tracing and financial investigations.

The Protocol requires competent authorities to be able to conduct financial investigations without delay, independently or alongside criminal investigations at all stages of proceedings. This includes after a confiscation order has been issued.

Such investigations are intended to be flexible in scope and may be used to identify the scale of criminal networks, trace and secure assets subject to confiscation, or gather evidence for criminal or asset recovery proceedings.

This emphasis on early and adaptable financial investigation underscores the Protocol’s objective of embedding asset tracing and recovery as a routine component of enforcement processes, while preserving discretion for competent authorities in how these tools are applied in practice.

Asset management gets the attention it deserves

The Protocol encourage states to shift away from perceptions that asset management is a secondary administrative task and instead view it as a necessary, value-preserving core function of asset recovery systems. It obligates States Parties to establish a detailed asset management framework, that includes:

• the possibility of selling seized assets before confiscation where property is perishable, rapidly depreciating or requires specialised management that is not readily available, thereby preserving value pending the outcome of proceedings; and
• measures facilitating the reuse of seized and confiscated assets.

Experience shows that preserving the value of seized assets requires more than legal powers. It also depends on having clear procedures, dedicated resources and expertise. This is particularly true for complex or newer forms of assets, such as cryptocurrencies.

The practical side of asset management is an especially important consideration for many of the Basel Institute’s partner jurisdictions, where asset management has often not been prioritised until now.

Lessons from the field show that strong asset management depends on the combination of legal frameworks and the capacity to putting them into practice, including specialized institutions for asset management.

Practical ways to enhance international cooperation

The Protocol introduces several measures designed to strengthen international cooperation between Financial Intelligence Units, Asset Recovery Offices and Asset Management Offices, as well as judicial authorities. On the latter, key measures we highlight as particularly valuable include:

First, mandatory standard forms for the transmission and execution of freezing and confiscation requests.

Although model templates already exist in a number of international and regional frameworks, their use is often optional. The Protocol seeks to promote greater consistency in requests, reduce delays caused by incomplete information and facilitate more efficient cooperation between authorities.

Second, Joint Investigation Teams established for the purpose of tracing and recovering assets liable to confiscation.

Joint Investigation Teams provide a mechanism for authorities to work together in real time, exchanging intelligence and evidence directly without relying on formal mutual legal assistance. While they are already envisaged under instruments such as United Nations Convention Against Corruption, United Nations Convention against Transnational Organized Crime and EU law, these frameworks primarily focus on the investigation of criminal offences. By contrast, the Protocol innovatively provides for Joint Investigation Teams dedicated solely to asset recovery objectives.

Joint Investigation Teams dedicated to financial investigations already operate in practice, but the Protocol provides a clear legal basis and encourages more systematic reliance on them. The combination of proactive domestic investigations and cross-border teams can be a powerful tool bolster the identification and ultimate freezing of criminal assets on a broader scale.

A powerful Protocol that can inspire all States – and is hopefully not a paper tiger

The Additional Protocol marks a clear shift in asset recovery towards an intelligence-led and institutionally integrated model of enforcement that also seeks to maximise the value of criminal assets that are seized and recovered by the state.

Its practical impact though, will depend less on legislative alignment than on whether states can build the specialised institutions, tools, expertise and cross-border cooperation needed to make early tracing, preservation and recovery operationally effective.

Depending on existing capacity, this may require legal reform, technical assistance and targeted training. Without this, the Protocol’s significance risks remaining largely theoretical.

In any case, even beyond the Council of Europe space, the Protocol provides a clear blueprint for jurisdictions seeking to strengthen their asset recovery frameworks. Its approach is closely aligned with the principles that guide our work with partner jurisdictions outside Europe. The Protocol will provide an additional tool to support countries in designing reforms that are both ambitious and grounded in their specific legal, institutional and operational realities.